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U.s. 13, Us 12, Ni Hao 12, Toyota 9, Cit 7, Cnbc 6, Trish 5, Mr. Whitman 5, Thain 4, Europe 4, America 4, Spain 4, Jim 4, Ellen 4, Fda 3, S&p 3, Greece 3, Alzheimer 3, Washington 3, Phil Lebeau 2,
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  CNBC    The Call    News/Business.  
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    February 8, 2010
    11:00 - 12:00pm EST  

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from buy to hold. >> st. jude medical. goldman sachs down 1%. walt disney and jpmorgan rating the company to a neutral. better than it was. obviously was a sell. boosting the price target. $30. 20 cents higher than it is now. and cme group a buy. now $330. trading $288. >> we rallied back again. go back and take a look at the intraday chart of friday's -- you know, again, i am not -- i'm just looking at it at a glance. not studying it. but it is a very v-shaped bottom. maybe we put in a bottom here. it will not -- there's friday. and -- you see that sometimes. that sometimes points to at least a temporary tradeable
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bottom. it could be -- i'm not saying it is. i'm not calling it. i'm just saying consider it because we rallied back from a significant loss at the open. back to down 11. back over 10,000. >> moved to a point there was a lot of confusion and no one could tell where we were going. two camps. people really bullish and people that are not. >> bullish, bearish and totally confused. >> right. time for "the call." >> see you tomorrow. good morning, everyone. welcome to "the call." i'm trish regan. 90 minutes into today's trading and stocks are making a comeback. off their lows. still concerns over foreign debt hanging over this market. we are going talk about what lit take to get the bulls back in. good morning, larry. >> good morning. larry kudlow. melissa francis is off today. you know what keeps ceos up late at night? attacks on foreign profits.
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we will debate whether it is a good idea or not. this is "the call" on cnbc. all right. stocks are trying to rally. worry about european foreign debt problem. financials under pressure. losses are being trimmed by home depot which is receiving a brokerage upgrade. john thain is back as head of cit. more on that in a few minutes. what have we got? s&p 500 in positive territory. the dow is well off its low point this morning. dow still off but come back strong. nasdaq is up. i believe gold is up. i believe the euro currency stabilizes. dxy is off slightly. trish regan never abates. >> hey there, larry.
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again, we are seeing the relationship between the market and dollar. the dollar just starts to come down there a tad. we are starting to see this market pick up a bit. we got the home depot upgrade. more on that in a moment. having a relationship to homebuilders. we have been talking about how the financials have really been taking it the chin. a lot of it as a result of credit concerns. all coming back to europe. >> you saw what's going on with light insurance companies. they are weak and a play on credit to a large extent. u.s. banks weaker. european banks take a look at the big names. the important thing is every day the banks have been down. credit suisse down 25% in the last month. i mean, that's a huge -- lowest levels from suisse. $40. back to may of last year to see at $40. >> credit suisse, obviously a foreign bank, has exposure to the european situation. so let's talk a little bit about the difference we see between u.s. banks and european names. >> important thing, good news is if you are worried about
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exposure to southern european continents, take a look at this here for exposure to greece rs france, switzerland, germany, have modest exposure here. i don't think the numbers are that large. a lot of people -- greece has not had a lot of exposure. it is the -- when you start looking at the idea this could spread beyond greece, look at spain. these numbers here, relevant testifily small. look at numbers for spain. much, much bigger. four times the number of exposure. that's why people are a little bit worried at this point because spain matters a lot more. look at the numbers. u.s. the 52 billion. you are talking about real money. >> that's why there is concern. >> banks that had lent the money out are the ones on the weak side. >> the fear is a domino effect where it is one -- then the next and so on. i want to move on to the homebuilders today. and we did see home depot
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upgrade. how's all this play thing n? >> morgan stanley had a note on. others bullish. morgan stanley's basic point is the home building turnaround is for real. they think the bottom is in and positive comments to say about home depot. the homebuilders are among the strongest groups here today. they did not have the huge sell-off most of the rest of the market did last week. unusually nice moves here. >> pretty nice. we are going to leave it there. bob pisani, thanks so much. head back over to larry kudlow. >> thanks, trish. two big names in the credit crisis are joining forces. cit group, naming former merrill cheap john thain as its new ceo. right now let's look at cit. trading up 3.5%. here's cnbc's mary thompson who joins us with more. >> both of these names are near casualties of the credit crisis. with bankruptcy giving cit a second chance, thain is given a chance to resuscitate his career
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in finance. in a lot of ways the two are a perfect fit. the 54-year-old thain arriving in midtown manhattan this morning just about a year after he was let go by bank of america. thain's new job, a chance to deredeem a reputation tarnished. goldman sachs and ceo of the new york stock exchange made him top choice to run a wall street firm before the credit cries i inability to assess losses at mayor and i will revelations of big bonuses to the employees after he sold it to b of a in 2008 tarnished his brand. a former colleague who asked not to be identified said thain could do well at cit if he manages risk better than he did merrill and a better listener at the company he now runs than the brokerage. runs a 102-year-old firm whose bankruptcy filing raised fears small businesses around the country would go fund this
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important source of funds failed. hurt by the expansion of subprime, student loans, bankruptcy allowed it to erase $10 billion in money and t.a.r.p. money the government invested in the fund. the challenges include funding cheaper ways to finance the business. he is receivinging a salary of $500,000. >> is he out of the court issue, andro cuomo, will he be able to give his undivided attention? >> if you read the complaint filed by the a.g.'s office he was not named in any way. he was out of. >> it mary thompson, thanks very much. trish, do you want to lead us here? >> i will take it -- i will take it from here. we want to talk more there about cit and whether or not it is worth investing in before we talk about the recent sell-off.
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not so much of a sell-off now. bit of a reversal here on the market. between want to talk with jim, fort foal yeomanager. mark, director of client investment strategies at russell investments. good to see you guys. mark, do i buy cit right now? >> well, it is a name that probably is more appealing to a deep value manager and i think time will tell. i think this is more of a story because of who is going to be running it necessarily than the stock itself. to me it means you -- cit is can it continue to provide loans to mall and medium sized businesses and whatever form of whoever is running it, a vital function particularly as we come out of this recession. to me, that's the bigger issue and what hopefully people will be focusing on, whether it is a good stock idea or mott and not necessarily the person that's been brought in. >> jim, certainly the person who is running it, mr. thain, has a good track record when it comes to, i guess, protecting his share holders in a very
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difficult time when we look back to mayor and i will bank of america. beyond mr. thain now running cit, do we believe then that the credit markets are starting to strengthen enough that this suddenly becomes a good investment? >> there is some appeal here. like a new orleans drew brees situation. a lot of people would argue with what you said about merrill lynch and it didn't really get navigated through the treacherous waters. >> i think that if merrill had -- on the same way of lehman. if we had gone that week and nothing had been done, no one stepped in to save merrill, then it would have been a very tough position for shareholders. >> let's move on. do i buy anything? that's what i want to know? what's your stock market position now? we have deflationary pressures coming from europe, debt credit potential defaults and potential
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leverages from credit default swaps. we have all kinds of things going. including still a usa economic recovery for profits. i want to ask you do we buy the stock market right now? that's the question du jour? >> the biggest problem for investors is uncertainty. as you mentioned we have uncertainty now. p not have only valuations up there and well ahead of where they were last year. but credit default swaps. have you too much uncertainty out there and you don't have cheap stock prices. there are areas i think are safer than others. i think health care and technology are doing better than the rest of the economy. i don't think it is a big -- good time for investors to be sticking their next out on the chopping block here. we are heavy in the vix. lighter in stocks and not looking to buy just yet because the -- uncertainty is too prevalent out there. too much head winds for us now. i think if we wait we will be able to buy stocks cheaper later in the year. >> what will be the signal, jim? >> the stocks have to get
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cheaper. we never hit the valuation lows that you typically hit in a bear market bottom last year. because we had stress test, artificial stimulus programs that kicked in and gave us a big sugar high and yet to be determined that this economy can be self-sustaining without the sugar highs. right now we are benefiting with the tallest munchkin in the room. you look at that time international problems. i don't think stocks are cheap. investors ought to wait for val weighings to come down zbland that greece and portugal and spain are very good tourist destinations. i want to ask you how important are they. we have had our 6%, 7% correction. monday morning. stock market is turning up as we talk here on "call the call." where are you on this? >> i think i will take the other side of that. trade being 13.5 times. 2010 earnings. cit to me is another story that seems to be a way for all of us to not talk about earnings. and earnings have come in quite well.
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revenue growth has been better -- little better than expected. we were due for a correction. gdp grew at 5.7% if i remember correctly. we don't seem to talk about that very much. earnings are delivering and gdp is there. we always live with a lot of uncertainty. pullback here, i think that, again, stay diversified. >> but -- >> you want to be in the market. >> pullback. >> i -- >> jim has a very bearish scenario, mark. what can you say to jim? have you an opportunity to talk directly to him. this can move the markets this morning. how do you respond? >> yes. he certainly has been right so far this year. i think what we see this year is going to be a scenario where jim and i could be right depending on the day. i looked right the first week. we starred out very strong. we had a pullback, volatility is here. people say volatility. lot lower when i talk to adviser and clients. it gets back to the long-term averages. depending on the day or week,
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either one of us can look correct. i think at the end of the year, i will come back on with jim and i will take the bet we see more to the upside than down side. >> we will hold you to it. thanks so much, guys. appreciate it. market up seven. when we come back, toyota's troubles. automaker may be preparing for global recall of jewel in the crown car, prius. phil lebeau will be with us. >> a plan to tax overseas profits. oh, my gosh. big business ceos up at night. >> you, too. >> it has me up at night. is it a good idea or is it a recipe for disaster? we will debate that in the call of the wild. 
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it is "the call." i'm matt nesto. harmon international. stock is up 4%. intraday high here today. what's the news? the news is what's going to happen after the close today. seven cents on $806 million. stock is beaten and buried the estimates of the past two reporting periods. keep an eye on harmon. hottest stock in my after hours watch. which is already up and running
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on a monday morning opinion. toyota is preparing a recall of the prius as early as tuesday followed by sometime steps in the u.s. ure open and other markets. that's according to a source familiar with the plants. the stock is down 1.7%. cnbc's phil lebeau joins with us the latest. he had been all over this story. my goodness. it seems like one thing after another. >> it does. i think it is coming to a head this week. we are talking about the 2010 prius model. 270,000 were sold between may and december. those are the ones that are the focus of question now. as you mentioned, toyota expected to announce a plan for the coming days. company selling 270,000. 124 complaints and four accidents regarding the brakes. the brakes not responding quicker. as for the other recall, the one with 2.3 million vehicles with sticky accelerator pedals,
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resuming sales of eight models suspended as they repair those vehicles now that they have the fix in the show rooms. six toyota plants should down for a week as they were coming up with new pedals they reopened and it ping redesigned gas pedals on the eight models. if you see the commercials over the weekend, they viewed on super bowl sunday. toyota launching a pr campaign of sorts to reassure customers one of the ads focuses on the history of the company in the united states and reliability. other one focusing on questions of the safety of the vehicles. again, debuted yesterday. you are going to see them with the heavy rotation. running them on cnbc. seen them on a number of other networks. as you take a look at shares of toyota today the real question becomes where is the bottom for this stock? i heard a number of people say listen, if it gets down into the mid 60s that will be a buy point. and yet, we see the stock continue to edge lower and lower. dropped down as low as 72 before coming back. there you see shares of toyota.
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a company that this week is going to have executives in front of members of congress in washington answering questions about what they knew, when did they know it, regarding all of the safety problem. >> one of the big questions here is that this is -- clearly a pr nightmare. talking about something that might keep a ceo up at night as we were talking about earlier. how much can this company's image really recover at this point? yes, you run the commercials for the super bowl. you try to get the word out there. but how much damage has already been done? >> the estimate that is out there -- this is just a guess at this point. the estimate i heard from the number of people from within toyota as well as within the industry not in toyota is they are going to take a 20% hit in sales. having said, it is hard to tell. depends in what we see from here. if we don't see more accidents if the company comes out and says we made all the fixes and generally quiet for the next six months to a year, they can come back. seeing more accidents -- you know, who knows. >> the key is, phil, is the end of the bad news? is this the end of the generic
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large-scale bad news? right now they have been slammed left and right. they got washington breathing down its back for all kinds of motives. bad news bears, is it over. >> they believe it is over and they have all of the problems identified and fix for all the problems. we will wait to hear about the prius as far as those repairs that we are going to be hearing about in the next couple of days. otherwise the company says it has its arms around this problem. keep this in mind. ten years ago, if you bought a ford bash brought up ford and said can the ford come back from the explorer controversy, they are dead. they are losing market share and never will come back. eight, nine years later, toast of the town in detroit. >> we will leave it there. thank you very much. when we come back, president obama taking aim again at big business. proposing a tax on foreign earnings. good idea? or will it kill job creation and the economy? we will debate it in the call of the wild. >> cnbc exclusive. we will go live to aid biotech conference in new york city. we will talk to the ceo.
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we will have the latest for you.
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up nearly 2%. gold really taking a hit over the course of the last week. just look at the one-week chart. you can see we are starting to see a small recovery there. people starting to get back in. >> what's keeping corporate ceos awake at night? the possibility of an obama administration tax on their foreign earnings. half of the s&p 500's earnings come from multinational foreign earnings. procter & gamble's ceo bob mcdonald says it is his biggest concern now. we asked should there be a tax on foreign products. we will go to greg bay, ceo of the manufacturing association. bernard whitman, ceo of whitman insights and strategies. is this a good time to be taxing american corporations either at home or abroad? >> it seems to me it is not a very good idea. and i think that in order to get the recovery started, we have to create jobs here in the u.s. and we have to make sure our companies are able to continue
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to be competitive globally. government is not going to be restimulate thing economy. ford announced a week or so ago in chicago they are creating 1,200 new jobs. suppliers around that plant will be hiring up. that's the kind of stimulus we need. not this idea of trying to tax on profits that are going on in foreign countries which really sounds good as a populist idea. bring the dollars back. let's understand the companies like caterpillar are competitive worldwide and have to be able to operate in those countries and reinvest their profits in those countries to be able to remain competitive. >> let's take the flip side of that with mr. whitman. i know you believe they are just not paying enough tax, multinationals, and that we need to up the rate. >> this is a question of basic fairness. we have a tax code in this country that says that if you create a job in bangalore, india, you should pay less taxes than if you create one in buffalo. that's fundamentally anti-small business.
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it is unfair to small business that's have largely kept their jobs and here in the united states. it encourages large corporations to outsource and shift jobs and production overseas. and it fundamentally allows these companies to put off paying taxes -- >> the question -- let me jump in -- some might say did two wrongs make a right? >> waiting a second. let's get the facts out. i beg your pardon. they get taxed overseas. you see, this is about the double taxation. and matthew slaughter of dartmouth wrote a great piece in "the wall street journal" op-ed says it is a job creator at home. europeans give them a tax credit. right now we are trying to take that tax credit away. this is -- this isn't about fairness. this is about double and triple taxing american corporate earn. >> that's absolutely false. this is -- >> i beg your pardon. >> large multinational corporations to cut their tax responsibility by as much as 50%. and, in fact in 2004, these companies paid $16 billion on $700 billion in earnings.
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>> stop. highest marginal business tax rate. go ahead. rebut that. >> you are exactly right, larry. we have the second highest corporate tax rate in the world. we are taxing our companies. where our competitors are not doing what the caterpillars world to remain competitive in u.s., china a europe. if we do, we want them to be able to reinvest in those facilities. a way for a manufacturing plant -- >> sounds like bernard is saying that to a certain extent. bernard, you said it is not fair that a company can relocate to india and create jobs there because it costs too much to have them in buffalo. so why not equal the playing field and lower the tax structure here in the u.s. so it does make sense to -- >> we need to -- right now, the truth of the matter is right now we are penalizing mom and pop shops by requiring them to pay their fair share of taxes while allowing large corporations to shift jobs overseas and get tax
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deductions at the same time they are getting billions of dollars in federal money. >> so it sounds like you don't -- >> the u.s. -- >> i beg your pardon, mr. whitman. we are penalizing small business because we are raising the top small business tax rate up to 40% from 35%. and that's the goofy part of this. i want to go back to you on this. why not give them a 5% tab rate, repatriate the foreign earnings, drop the top corporate tax down to 20%? which is closer to europe. let's bring the capital home and give them a one-time break which we did about five years ago. then have real tax reform by broadening the base and lowering the rates for large and small businesses to stop this silly class warfare. >> class warfare is exactly right. this is not about penalizing mom and dad type of operations. supplier network to our large multinationals are everywhere.
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as i described in the board example by them creating more jobs in their facility, that spins off into the supplier network. you -- when you talk about bringing the money back, those companies bring money back when it is appropriate that they have not invested or continue to invest in those locations because they are selling around the world. let's understand, we are exporting our jobs, our -- our -- we are not exporting our jobs. we are creating jobs and being able to expand here in the u.s. as well. >> as is typical, the american taxpayer is way ahead of the politicians on this. two and three american taxpayers don't believe corporations pay their fair share and truth of the matter is we have a trillion and a half -- 1.5 trillion deficit coming up. someone has to pay this bill. >> you are not going to get a nickel from this. you are not going to get a wooden plug nickel from this. this is one of the wacko liberal ideas.
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i want to tell you something, let me ask you this, honestly, mr. whitman, you don't expect congress to actually pass this tax hike on corporations? i mean if the democratic congress were to do this, instead of losing 50 seats, they will lose 90 seats. you and i both know it. this thing is going nowhere. >> vast majority of jobs in this country are created by small zbis about time the american congress respects small business in the same way they kowtow to small business. >> let me point something out. mr. whitman, you are saying it is not fair these jobs go overseas. these jobs go overseas. in other words, why not make this -- tax structure better in the u.s. so that it is an equal -- >> tax them once. tax corporate income once and only once. that is the major reform. >> well, the point is that this -- the administration's proposal from last february has already changed dramatically. this administration continued to send a message to american
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business that you are the ensxhi talked about cap and trade. you talk about an environmental protection agency out of control. what our companies need in this country is predictability and stability in the tax code, not these kind of -- >> we need tax incentives. the one thing that has not been tried in all of the employment and -- unemployment frustrations is lowering marginal tax rates for supply side incentives. astonishing to me. one thing they -- >> we pay -- corporations pay a lower percentage of tax -- >> sorry, guys. mr. whitman -- >> i appreciate it. thank you very much. >> all right. >> i thought i would weigh in. >> after the break. >> you are right, trish. we need low tax reform. right here at home. you are exactly right. >> if you want to keep jobs here, you have to find a way to incentivize corporations. bernanke's height rate plan. we will take a look at the
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policy shift. >> it costs $150 billion a year to treat alzheimer's. medivation is helping find a cure. the stock is up 80% of the year. their ceo joins us about their late stage development drug.
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the fed is set to unveil its rate hike plan. it is going to be a delicate balancing act for policymakers. steve liesman heads big reporting on this story for weeks, months, maybe years, joins us now with the very latest update. steve, what are they cooking up? >> you know, the question, you know, fed chairman goes to the hill wednesday. the question is whether we will hear anything new from the considerable talk from the fed already about the exit strategies which we reported quite a bit. fed has been transparent about the plans to unwind easy policies. not necessarily in one place. the reason the fed wants to let markets know what it is cooking up for the piece. but afraid too much talk to believe war over the financial cries sis over. the fed does want to signal imminent change in policy which it talks about the tools to reverse that policy. fed has been on the two-track process. it is continuing to expand its balance sheet with some programs from the crisis running off but other are in place. continue to purchase mortgage which is is set to end next
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month. the fed's other track to work out behind the scenes a series of measures to eventually withdraw all that extraordinarily liquidity. they include the interest on reserves. that becomes the new fed funds rate. term deposits, cd for a bank. there is a trillion dollars in excess reserves. reverse repos and as well as selling assets. st. louis fed president said in an interview he believes the fed could begin selling assets in the second half of the year and said that would become before raising rates. we might understand what bernanke thinks about it. wanted the fed to stop promising to keep interest ray exceptionally low for an extended period. fed chairman ben bernanke will lay out options important the policy. it is unlikely to signal any imminent change in that poll sxwli with a very strong dollar -- we will talk about this. with a very strong dollar which is a very weak euro, i think this complicate it is fed. trish, back to you.
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>> change in policy? hold on. we may have a nobel prize to award here. >> who was it that said -- i believe it was john maynard cains said, when the facts change i must change. >> this is important. >> write it down. 11:35 monday morning. stick around. we want to talk more about the fed's plan to tighten here. joining us, former treasury deputy secretary, dan mitchell. good to see you. roger, you have unemployment rate below 10%. host of other indicators out there suggesting that we are -- rather the worst of it is perhaps over. depending on what school of thought you believe in. let me ask you, is it time for the fed to consider the rate hikes? >> not at this moment, trish. we -- the economy, after all, lost jobs last month. 20,000 of them. rather than gained them. even though the unemployment rate ticked down. that had do with statistical aberration on the shrink kaj of
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the labor market. the outlook for growth is weak. i think the consensus forecast currently is 2.6% real growth. that's about a third or little less than a third of the rate we would normally expect to see in the first year after such a severe recession. so the outlook for growth and the outlook for jobs at this very moment is still very weak. at some point this year -- at some point this year the fed will make this move. but i believe that they will watch the data just as carefully as -- carefully as possible before doing that. the moment hasn't arrived yet. >> really, look, you can do about -- paying interest rates on excess deposits. but to me, that's a bit of a smoke screen. the fed's overall creation of money by expanding their balance sheet, dan. i want to get your take on this. do you feel that the fed will start shrinking its balance sheet this year which is the ultimate source of new dollar, new money creation? >> well, like you, i have
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been -- bernanke's commitment to a sound dollar. but i'm actually a little more optimistic about the thing about paying interest on reserves. we have the excess liquidity out there. if the fed basically encourages the banks to leave all those excess reserves at the fed because they increase interest rates as they signal maub happening, that money can't be used -- >> but they can make a decision, dan. the thing that troubles me about this, this is technical but if business loan demand does pick up, if that occurs, then, you know, the fed is thought going to pay enough money on deposit of the central bank. the people will go, banks will go for higher prime rates, interest spread will determine it. i think that's the flaw in this interest rate idea. >> no. if you are asking whether i'm happy with what they are doing, no. i would rather have a much stronger signal that we are not going to have easy money. let's remember it, easy money got us into this economic crisis. so it is not the solution. >> be careful.
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steve, you know, you mentioned -- just earlier, that the fed, of course, has been very transparent with its policy all along. what kind of signal do you think investors are going to get when it is time to raise? >> you know, i think one way to think about this is that this either lead the way or lead you astray. i would say that he sleeding the way to the debate at the fed which is the debate over precommitment. central bankers genetically are against precommitting to what the future policy will be. they like to have the flexibility. i think that in the neck four -- three to four months the fed will move away from that precommitment of exceptional -- over an extended period. >> roger, let me end with you. this is a fun story. you have become as a former deputy secretary of the treasury under clinton and hard money man and you are a fiscal hawk and have many other assets and attribu attributes, you have become the leading obama barber. we can talk about the fed's exit
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strategy. what about this overspending and overdeficit, overborrowing exit strategy from the obama administration? >> well, off-line i will challenge you on that characterize ace of mine being the leading obama fiscal basher. >> you are all over the place. they are talking about you all over place. they are coming up to me on the street. >> you are walking down different streets than i am. we all know that fiscal outlook is grim. and the -- people who said so most loudly and -- i -- i cop end them for it. are those in the administration itself. i have never seen in my experience a budget describe itself the way this one did. it said right up front here is our budget. it doesn't go far enough. it is not on a sustainable path and that's why we are going to have a deficit reduction commission. that's quite a startling
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statement. and so it makes clear that they themselves believe that the path over the medium term is not sustainable. i long had the view that our leaders, congressional leadership, administration, get together and proactively address the deficit as was done in 1993. or alternatively at some point over the next two years or so, financial markets will revolt and impose a solution. one way or the other, that budget path is not going to be -- >> there you go. financial market vigilantes will impose a solution. you are right. i'm thinking about today's nobel prize going to roger altman for that thought alone. >> that's a big honor. >> we have run out of time. daniel is shaking his head. thank you, steve liesman. up next, a cnbc exclusive. ceo of medivation.
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>> very important. we will talk about america the charitable. are the country's wealthiest still donating in this tough economy? we will have a look for you. we will be right back. what do you think? hey, why don't we use our points from chase sapphire and take a break? we can't. sure, we can. the points don't expire... ♪ there is nothing for me... ♪ there's no travel restrictions... we could leave tomorrow. we can't use them for a vacation. you can use the points for just about anything. i know... ♪ the way you look tonight ♪ chase what matters. get your new chase sapphire card at chase.com/sapphire.
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cvs attracting more benefits to the management unit. cvs is up over 6.5%. trish, over to you. >> major biotech investor conference is taking place in new york city. as we speak, cnbc pharmaceuticals reporter mike huckman is right there and joins us with a special guest. take it away, mike. >> good morning, trish. the alzheimer's disease drug market is a $4 billion earmark it that's expected to multiply dramatically as the boomer generation ages and if new drugs work in treating this very difficult to treat disease. one of them that's furthest along now is called dimobam. it is owned by pfizer and medivation. i'm joaned now by dr. david hung. good morning, sir. thanks for being here. >> thanks for having me. >> so this was -- it was a
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hayfever drug in schaap. how did they determine something as simple as an antihistamine that would work in treating a complicated disease like alzheimer's? >> it was originally marketed as an antihistamine, it works by a different mechanism and has beneficial effects in models of alzheimer's disease. first clinical trial in the last publication a year and a half ago. >> there have been reports, dr. hung, that say that your first set of key make or break late-stage study data could be coming out next month. is that accurate? i'm told that the options market is pricing at about a $16 move to the upside if these results are good. >> with the acceptance of our first local trial, pivotal by the fda, we have seven trials that are either -- ongoing, five independent shots on an approval
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drug. the first one would be the second confirmed study called a connection trial. first half of year. we also have another shot on goal with another trial for alzheimer's disease. prostate cancer. >> first half of this year. what about march? >> first half. >> if the results that just talked about are positive, what's the timeline for filing for fda approval? could the fda speed up the approval process because this is such a huge burgeoning market of this? >> one of the most serious diseases we face as a society. last year we spent $148 billion in u.s. alone in alzheimer's related health care costs. this is a very important disease area. we and fiz rer committed to bring this to patients as quickly as possible. >> speaking of quickness, the split between you and pfizer, tell that for the audience. >> 60% of our development costs going forward in the united states.
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100% of our u.s. costs. 60% of the profits in the u.s. 40%. royalty on sales. >> 60/40 split. dr. hung, thanks for joining us. coming up on "power lunch," ceo of another biotechnology company that just announced a $13,000 a year price tag, trish, on its newly approved ms drug. >> looking forward to it. thank you. a quick break and then we will be back. 50 most generous donors in the country gave a total of $4 billion to charity last year. will this tough economy make them turn back? >> we will have the market in this afternoon's trading session.
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well come back to "the call." i'm diana olick in washington. jumbo delinquency could rise to 10% of all prime jumbos as early as next month. delinquencies nearly tripled in 2009. the federal government may be closed today but the chairman of the house committee on oversight and government reform is open an investigation into the treasury making home affordable program. mortgage bailout program.
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numerous concerns regarding the program's effectiveness in helping struggling bore others. it is official. the mortgage bankers association will sell its hq building in d.c. to coast guard group for nearly half of what it paid. they bought the ten-story building at the peak of the housing booming in 2007. check back with the realty check. up next, the play today in d.c., igloo construction. put your money in it. >> america's richest people donated just over $4 billion last year. what impact will this tough economy have on donations going forward? well, cnbc's jane wells joins with us a special guest. hello, jane. >> hi, larry. andrew carnegie said to die rich and to die disgraced. 2009, lot of wealthy people gave a away a lot of wealthy money. joining me is stacy palmer, the edit editor. you this for coming on you
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called 2009 a dismal year. top 50 was down 75% from the year before. you say donors are being smarter and more creative. what do you mean by that? >> a lot of donors are giving to solve big social problems instead of build a building. they are giving money to a think tank to figure out how to solve problems. they are dealing with the financial crisis and giving to affordable housing and tackling the very tough issues. we see a lot more creativity in their giving. >> the top gives were stanly and field and drunken mill their dounated to fighting poverty. bill and melinda gates, michael bloomberg, who on the list was maybe surprised you or did something different this year? >> george sorensen's gifts are extremely interesting because one of the things hay is doing is fighting climate change and dealing with the economy. one of my favorite gifts was from the fifth on the list, louise who wanted to make sure
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the arts groups thrive. gave them special incentives they have to work together and can't fight it out on their own. >> warren buffett is mott on the list even though he gave more than $1 billion worth of shares last year. that's because the methodology he pledged it in an earlier year. could it mean that giving was better than we think in 2009? >> it was a little bit better but in -- what we are counting is new commitments and so we are comparing new commitments last year with this year and it is still a bad year. >> stacy palmer, thank you for joining us. trish, only 17 of the 400 wealthiest americans made the top 50. only 17. >> my goodness. okay, thank you so much. we will take a quick break and then we will be back with this morning's market action. down five now on the dow. >> we will give you the list of stocks to watch as we head into afternoon trading.
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we want to show you utx, united technologies raised the dividend by 10.4% to 42 1/2 cents a share. the announcement coming out moments ago. take a look. shares there of the united technologies trading down slightly. down 49 cents right now. it is time for "the call to action" the stocks you need to watch during afternoon trading. our very own matt nesto is here with a look. >> i'm checking out the consumer durable and apparel index here. look at this intraday comparison versus the s&p 500. of the industry groups, none better than the consumer. auto parts, pretty slim up about 2%. consumer durable group very strong year to date. couple of key reasons why. check out my durables, if you will. they are back, folks. hasbro,